Dive Brief:
- Chipotle saw its same-store sales increase 0.3% in the third quarter of 2025, according to the brand’s earnings release.
- The growth was driven by 1% growth in average check size, but offset by a 0.8% decline in traffic. Consumer headwinds are likely to continue, with key demographics facing considerable pressure, CEO Scott Boatwright said on the chain’s Wednesday earnings call.
- Boatwright attributed the chain’s sales performance to a combination of increased marketing spend and menu innovation, with its Adobo Ranch sauce aiding in customer acquisition and its Carne Asada LTO performing well. The premium price point of the LTO protein, which relaunched late in the quarter, may have driven some of the increase in check size.
Dive Insight:
The economic problems that hurt Chipotle’s transactions are likely to persist, if not worsen. Boatwright listed a litany of challenges facing the brand’s consumer base on the earnings call. Consumers in households with income below $100,000 — 40% of Chipotle’s consumers — are still pulling back on spending due to economic concerns and inflation.
“A particularly challenged cohort is the 25- to 35-year-old age group,” Boatwright said. “This group is facing several headwinds, including unemployment, increased student loan repayment and slower real wage growth. We tend to skew younger and slightly over-indexed to this group.”
A crowded value and promotional environment may have hurt Chipotle’s traffic too, Boatwright said.
According to a note from William Blair analyst Sharon Zackfia, the chain’s Q3 bump in sales may be fleeting, and the analyst firm lowered its estimate for the brand’s same-store sales growth in Q4 to -2%. The brand itself expects comps to decline in Q4 by low-to-mid-single digits.
Boatwright said the brand is looking at several strategies to increase transactions in the long run. While Chipotle is looking to emphasize its value proposition, Boatwright said that does not include advertising based around specific price points — like the moves made by McDonald’s and other QSR competitors.
“Value as a price point is not and will not be a Chipotle strategy,” Boatwright said. Instead, the fast casual giant will try to emphasize elements of its brand that make it stand out.
“We are planning to launch a new creative campaign that spotlights what sets Chipotle apart, including clean ingredients, freshly prepped in our restaurants each day using classic culinary techniques, served in abundance at a speed and price point you can't get anywhere else,” Boatwright said. The new ads will debut this quarter and continue into 2026.
Other efforts to entice consumers include a push to emphasize catering that began with an equipment test earlier this year.
“Our goal is to scale the catering business within our restaurants without disrupting the core operations. With catering at 1% to 2% of sales versus our peers at 5% to 10%, it could represent a meaningful opportunity in the future,” Boatwright said.
The brand is also specifically trying to engage younger consumers through its Chipotle U rewards program, which only college students are eligible for. Program members are increasing their spend, Boatwright said, and the chain plans to make some new additions in hopes of driving member acquisition and frequency.
